Emerging-Market Stocks and Currencies Fall on Hormuz Tensions
· Business · Bloomberg, LiveMint
Emerging-market stocks halted their recent advance as rising geopolitical tensions in the Middle East boosted crude oil prices and strengthened the dollar. An index tracking the asset class's currency returns also declined during the session. The flare-up centered around the Strait of Hormuz drove investors toward safe-haven assets. Higher oil prices and a stronger US dollar typically pressure developing economies by increasing import costs and capital outflows. Financial markets continue to monitor regional developments for potential disruptions to global energy supplies.
Why it matters
Rising oil prices and a stronger dollar directly increase import bills for developing economies, putting pressure on foreign reserves and domestic currencies.
Read the original report — Bloomberg
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